Telecoms Giants Bid for Zamtel

Telecoms

Two of India's biggest telecommunications firms and one of Africa's largest communication service providers, are among eight foreign companies and consortia that have been shortlisted to buy a stake of between 51 and 75 per cent in Zamtel.

South Africa's Telkom, one of Africa's largest telecommunications firms in terms of operating revenue and assets is on the list of the shortlisted firms. Telkom has been pursuing opportunities in Africa over the last five years.

India's State-owned Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL), which are both part of a consortium and also looking to buy a 46 per cent stake in Kuwait mobile firm Zain, also prequalified to bid.

BSNL has cash reserves of more than $7 billion and is the second-largest telecommunications company in India with 57.3 million mobile subscribers and 28.5 million fixed line customers, trailing only Bharti Airtel.

The New York-listed MTNL operates in two of India's largest cities, New Delhi and Mumbai as well as Nepal through a joint venture called United Telecom Limited. MTNL also operates in Mauritius through a unit called Mahanagar Telephone Mauritius Limited (MTML) and submitted interest in a stake being sold in Nigerian telecommunications firm, Nitel.

The rest are Altimo Holdings or Vimpelcom of Russia, LAP Green Limited or LAP Green Networks of Libya, Portugal Telecom, Orascom Telecom Holdings or Telecel Globe Limited of Egypt as well as the UNITEL consortium of Angola.

ZDA director general Andrew Chipwende announced the names of successful prequalified companies and consortia at a media briefing in Lusaka last week. Chipwende said all the prequalified participants had met the criteria set out for prequalification and were internationally recognised telecommunications operators with a strong track record in emerging markets investments.

During the course of the prequalification process, the ZDA received 30 expressions of interest in the Zamtel privatisation. He said prequalified companies and consortia would be invited to participate in the due diligence process scheduled for November 2, 2009 and was expected to end on December 23, 2009.

To maximise transparency and ensure total confidentiality, the ZDA had established a secure virtual data room, allowing prequalified participants to examine all key Zamtel documents remotely.

The virtual data room would ensure candidates gained access to exactly the same information and for the same amount of time. Chipwende also said participants would be asked to submit a bid for between 51 per cent and 75 per cent of the equity in Zamtel based on their own evaluation of the company and the market opportunity.

Around January 11 next year, the ZDA would announce shortlisted bids and successful companies or consortia would be invited to take part in the next phase of the process. All the eight prospective bidders had paid a non-refundable administration fee of US$20,000 prior to their submission of the prequalification application form.

Chipwende said the door was not closed to Zambians because they would still acquire stakes in Zamtel in future when Government offloads its shares to the public on the Lusaka Stock Exchange (LuSE).

Preferred bidders were asked to meet a minimum of US$250 million shareholders' equity for private entities or a minimum market capitalisation of US$500 million for publicly listed entities.

The Times of Zambia